2020 Ad Outlook – Ad Buyer Survey VIII

The Cowen Insight

We surveyed 50 US ad buyers representing ~$12.5BN in ad spend in early Dec ‘19. Ad buyers are more bullish on ’20 US ad spend (vs. ’18/’19) given robust Digital growth, solid macro backdrop and strong ROI. Digital will continue to gain share at the expense of traditional mediums, driven by Video & Social growth. Amazon, Instagram and YouTube are the biggest expected ad share gainers in the coming years.

Cowen’s 8th Annual Ad Buyer Survey: Key Trends & Stock Conclusions

  1. US Ad Buyers More Bullish Entering ’20: The ad buyers overall expect their ’20 US ad spend to rise 4.4% y/y on a spend-weighted basis, above +3.8% expected for ’19, as ad buyers indicated key drivers including: further robust Digital growth, strong consumer / macro, and high return on ad spend.
  2. Ad Buyers Surveyed Expect Digital to Continue L-T Share Gain Trend at Expense of Trad’l Mediums: Key drivers: 66% expect ad spend shifting from TV, 58% expect Digital to drive ad spend growth and 28% expect shift from non-TV ad mediums. We forecast the US Digital Ad market rises to $146BN in ‘20, +16% y/y and ~57% of total US advertising vs. ~53% in ’19.
  3. Raising Cowen’s WW & US Digital Adv. Forecast: We forecast WW Digital adv. of $357BN in ’20, +16% y/y and rising to $609BN in ’25, an 11% CAGR; we raised our established WW Digital adv. estimates ’20-’24 by low/mid single digits annually. We forecast US Digital adv. of $146BN in ’20, +16% y/y and rising to $257BN in ’25, a 12% CAGR. Key drivers include (i) Mobile (form factor) and (ii) Video and Social (channels).
  4. Video Adv. Largest Share Gainer within Digital: From 19-’21, Digital Video to pick up 4% share of total Digital Ad budgets per ad buyers surveyed, aligning with cont’d shift from TV and rising Mobile Video ad effectiveness.
  5. Ad Platform Share Gainers: YouTube, Instagram and Amazon are expected to pick up ~2% share of ad budgets the next two years.
  6. Which Platforms Outside of GOOG and FB Could, or Are Emerging as a Meaningful Part of Your Digital Ad Spend? 40% of ad buyers listed Amazon, vs. 14% for Pinterest, and 6% for SNAP. 36% suggested GOOG and FB properties would comprise majority of their Digital Ad spend for the foreseeable future.
  7. Leading Platforms for New Branding Campaigns to 13-34 Demo: Ad buyers suggested IG and YouTube were clear leaders, with SNAP also a factor. TV is not relevant for this demo at this point.
  8. Leading Platforms for New Branding Campaigns to 35+ Demo: Ad buyers suggested TV still leads, but FB and YouTube closing the gap.
  9. Mobile Video vs. TV: 64% of ad buyers suggested Mobile Video ads were more effective than TV vs. 62% last year.
  10. User Privacy Concerns: An issue for Core FB, YouTube, IG and Ad Exchanges, while zero impact on Google Search, Amazon and Pinterest.

FOR MORE INFORMATION, CONTACT YOUR COWEN SALES REPRESENTATIVE

Get the Full Report

If you’re already a member of our Research portal, log in.

Log In

If not, reach out to us directly for more information.

    More Like This

    Representing the shift to cloud technology is a blue network foregrounding the blue webscape that is the internet.
    Ahead of the Curve®

    Telco vs. Cloud and Private Networks

    Read More >
    Video
    Consumer shopping cart on a digital tablet

    What will it take to win in the new consumer environment?

    Read More >
    Video
    Young shoppers representing the Millennial & Gen Z consumer
    Ahead of the Curve®

    Gen Z & Millennials Inflection Point

    Read More >